The financial benefits of fixed–mobile convergence discounts: assessing the impact on operators’ profits

This report assesses the financial impact of fixed–mobile discounts (or fixed–mobile convergence (FMC) discounts) on operators’ profits. It explores the optimal FMC discount strategy to enable an operator to maximise profit based on its positioning in the fixed and mobile markets.

The report compares the following two strategies for each type of operator.

• The operator offers fixed–mobile discounts.
• The operator promotes fixed and mobile services separately.

We have conducted a scenario analysis. Our simulations replicated, in a simplified manner, the most common situations that operators face in the real world. The model used mirrors our understanding of FMC discounts.

Key questions answered in this report

• What is the impact of the promotion of fixed–mobile discounts on operators’ profits?
• Which operators can maximise their profits by offering fixed–mobile discounts and which operators can maximise profits by offering fixed and mobile services separately?
• Under which circumstances should an operator offer fixed–mobile discounts, and when should it offer fixed and mobile services separately?